Hudson Technologies, Inc. · NASDAQ:HDSN
Hudson Technologies — Investor Presentation (August 2014)
18 slides from Hudson Technologies's investor presentation, August 2014
Slide 1: Refrigerants, Recycling & Energy Efficiency
REFRIGERANTS, RECYCLING & ENERGY EFFICIENCY NASDAQ: HDSN Investor Presentation May 2014 August 2014
Slide 2: Forward-looking statements
Statements contained herein, which are not historical facts constitute forward-looking statements, involve a number of known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future r
Slide 3: What We Do
What We Do Provide refrigerant for use in cooling systems (e.g. air conditioning) Recycle (reclaim) refrigerant Hudson is largest reclaimer in U.S. Provide system service and energy optimization 3
Slide 4: Investment Considerations
Investment Considerations • Refrigerants and Reclamation − EPA has mandated that virgin R-22 will be 100% phased out by 2020 − Reclamation will be only source of R-22; Hudson largest reclaimer − Majority of cooling systems run on R-22 and have shelf lives of 20+ years − Reclamation drives Hudson’s b
Slide 5: Our Businesses
Our Businesses Leading National Provider of Full Range of Refrigerant and Engineered Solutions PRODUCT OFFERINGS SERVICE OFFERINGS Refrigerants Reclaimed and virgin refrigerants including Freon, R-22, HFC and replacement blends One of the largest independent distributors Markets served: air co
Slide 6: Market Opportunity
Market Opportunity • Product Sales: $1 Billion U.S. Aftermarket – Fragmented market; Hudson one of largest independent distributors • Hudson sells all types of refrigerants and has developed an extensive distribution network • Majority of organic growth to date has been from refrigerant sales – Over
Slide 7: Hudson Becomes Producer as Refrigerants are Phased Out
Hudson Becomes Producer as Refrigerants are Phased Out Hudson sells & reclaims all 3 types of refrigerant CFC: 1st phase-out 100% reclaimed R-22: 2nd phase-out Will become 100% reclaimed HFC: expected to be phased out Will become more widely reclaimed 7 with future phase-out
Slide 8: Leader in a Fragmented Market
Leader in a Fragmented Market Reclaimers ~30 different companies 8
Slide 9: R-22 Supply/Demand Imbalance
R-22 Supply/Demand Imbalance 70+ million 80 pounds demand Virgin R-22 Supply in 2013 Supply Gap; Reclamation 70 Opportunity Hudson’s Projected Current EPA Preferred Option 60 R-22 Demand 50 (Pounds in millions) 40 63.0 30 51.0 20 30.0 24.0 10 18.0 12.0 6.0 0 2013 2014 2015 2016 2017 2018 2019
Slide 10: EPA Update
EPA Update • On December 5, 2013 the EPA issued a proposed rule for R- 22 allowances for 2015-2019, returning to the original step- down approach – EPA’s current preferred allowance for 2015 is 30 million pounds; phase-out ends at zero by 2020 – Comment period concluded in March 2014 – Nearly all co
Slide 11: Recycling Cycle
Recycling Cycle Contractors capture dirty gas, return to distributors & Hudson Distributors Price drives reclamation for Hudson 11
Slide 12: Service Offerings
Service Offerings • Remediation Solutions – Reliability & Emergency Services • U.S.: $500 million land-based/$75+ million marine • International opportunity similar to U.S. – currently in UK and RSA • Have served more than 50 of Fortune 500, including 15 of Fortune 50 • Energy Engineering Services –
Slide 13: Energy: $200B Annual Spend
Energy: $200B Annual Spend Industrial Facility Utility Budget Chillers Boilers Chillers (typically 20% inefficient) Boilers Lighting, Equipment, etc. Water Miscellaneous Water Treatment Program Hudson Serves Two of the Larger Spending Areas: Chillers and Boilers 13
Slide 14: Inefficiency Costs Greater Than $20B Annually
Inefficiency Costs Greater Than $20B Annually Annuity-Based Revenues Hudson Software Monitoring Boilers Air Compressors Chillers Energy Engineers Operations Systems Customer Facility Hudson Solutions Refrigerant Sales Field Services Engineers • System Data • ChillSMART • Energy Assessments • Monitor
Slide 15: Financial Review
FINANCIAL REVIEW 15
Slide 16: Historical Revenue Growth
Historical Revenue Growth Quarterly Revenue Annual Revenue $ millions $ millions $25 Q1 Q2 Q3 Q4 22.9 22.3 $20 16.9 16 15.8 15.2 15.6 14.7 14.8 14.5 $15 13.8 11.9 $10 9.1 8.3 8 6.6 6.5 4.9 4.8 $5 4.1 3.9 2.8 $0 2009 2010 2011 2012 2013 2014 16
Slide 17: Conclusion
Conclusion • Positioned to significantly increase profitability as $1B market opportunity unfolds − Largest reclaimer − Infrastructure and proprietary processes in place − Opportunity for significant earnings growth: • Long-term gross margin > 35% • Long-term operating margin > 25% • Opportunity to
Slide 18: Contact Us
Contact Us Company Contact: Brian Coleman, President & COO Hudson Technologies, Inc. (845) 735-6000 ext. 6007 Investor Contact: John Nesbett/Jennifer Belodeau Institutional Marketing Services (IMS) (203) 972-9200 18
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